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GBP/AUD Forecast: Pound Australian Dollar Exchange Rate Strengthens after RBA Stability Review

April 9, 2021 - Written by John Cameron

The Pound to Australian Dollar (GBP/AUD) exchange rate has strengthened this morning after the latest Reserve Bank of Australia’s (RBA) stability review casted doubts over the Australian economy.

At the time of writing the GBP/AUD pairing are currently trading at around AU$1.7998 as a more cautious market mood weighs on the Australian Dollar.

Pound (GBP) Steady after UK’s Use of Moderna puts UK Vaccine Rollout Back on Track

The Pound has found support from the UK’s ongoing vaccine rollout to combat the coronavirus.

The second stage of England’s lockdown easing which comes into force after the weekend is expected to start the reopening of the UK’s economy in the coming months which could push investors to buy into Sterling.

Though the Pound has rocky week surrounding the potential safety issues with the AstraZeneca vaccine which led the UK’s medicines regulator to recommend an alternative vaccine to those under the age of 30, the introduction of the Moderna vaccine appears to have offset any major concerns.

The Pound also found support against the Australian Dollar this morning after the UK’s latest housing price index from Halifax showed a new record high in the sector.

Russell Galley, managing director at Halifax commented on the growth saying:

‘Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic.’

Australian Dollar (AUD) Weakens after RBA Stability Review

The Australian Dollar is weakening against the Pound this morning after the latest RBA stability review.

The semi-annual review from the bank confirmed that bank is keeping an eye on rising house prices in the country as strong demand from first-time buyers coupled with low interest rates looks set to push house prices even higher.

The bank was also cautious surrounding an incomplete, or uneven economic recovery, as reported by the RBA:

‘If incomes remain below pre-pandemic levels, as government support is wound back, it increases the likelihood that some borrowers exhaust their financial buffers and ultimately default.’

‘Risks from rising asset prices and debt could build, particularly if lending standards are weakened. Persistent increases in asset prices could lead to expectations rises will continue and so increase risk taking and borrowing, especially given low interest rates.’

A general risk-off trade this morning is also weighing on the risk-sensitive ‘Aussie.’

GBP/AUD Exchange Rate Outlook: Coronavirus Developments in Focus

Heading into the weekend, the GBP/AUD exchange rate will be driven by any further coronavirus developments.

As England prepares for the second stage of lockdown easing at the start of next week and the continuing vaccine rollout, investors could head towards the Pound as the prospect of the UK’s economic recovery moves ever closer.

Australian Dollar traders will be keeping an eye on the global market mood over the weekend, a pullback in the US Dollar could allow AUD to head higher.

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